Share scams

I don't understand this:

Uk registered company (private). Shares are pushed by (presumably) offshore bucket shop to unsuspecting buyers (in UK).

Presumably the scammers would have to purchase shares from existing holders. I always thought the company would/could block any transfers. Surely they would block these transfers and report it as suspicious activity to the authorities and issue a warning as to what was going on?

You will probably never get the shares or the shares issued are for a non existing company.


Paul

Trader333 said:

You will probably never get the shares or the shares issued are for a non existing company.


Paul

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Er, no. Got certificates, got letter from company saying that the buyer (NOT ME!) is on the register and "these acquisitions came on to our Register by way of share transfers, ie they would have been purchased from existing shareholders (or a third party acting for them) and *******(the company) recieved no benefit from Mr*******'s outlay"

Seems to me there must have been some collusion or at least no attempt to stop it (presumably in normal circumstances very few shares would change hands).

How do you know that the letter is genuine? Could it not be from the boiler room operators, just another part of their con?

maiden22 said:

How do you know that the letter is genuine? Could it not be from the boiler room operators, just another part of their con?

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I wrote to the company (in the West End) and they replied by post. They have a registered No. and a UK telephone number. The letter is signed by the Co. Secretary--all seems quite genuine.
I just don't get it.
I have seen similar before (Bactrol).
I mean I get how it works. The scammers buy a chunk of shares (I wonder who from-surely there can't be many shareholders) at a very low price (let's say 1% of the company at around £4000). Let's say this is 400,000 shares. They then hard sell these to unsuspecting punters at 10p(?) each making £40k (less £4k).
But I always thought that transfer of a private company's shares had to be approved by the company. It therefore seems that the company must be aware of what was going on.

Hi raysor - Then again, anyone can set up a private company, its not expensive (about £25 apparently) or difficult. The registered office can be anywhere, the company's general mail address could be just a forwarding service. Of course the company or the Company Secretary will confirm its a real company because it is.

This might turn out to be a brilliant buy, but I hope you are not in deep.

tomorton said:

Hi raysor - Then again, anyone can set up a private company, its not expensive (about £25 apparently) or difficult. The registered office can be anywhere, the company's general mail address could be just a forwarding service. Of course the company or the Company Secretary will confirm its a real company because it is.

This might turn out to be a brilliant buy, but I hope you are not in deep.

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As I said I am not in at all. I may be stupid but not that stupid!

Try this then: set up a private company and start selling shares in it to the general public.

What happened to Natrocell and Bactrol?

I think the Sopranos were selling them in Series 2.

tomorton said:

I think the Sopranos were selling them in Series 2.

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On that note (no pun intended)....

It is best to be referred by someone who is sure of the company.

jaspertrademaster said:

It is best to be referred by someone who is sure of the company.

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What do you mean?

The share entry register gets updated at regular intervals.. not every instant .. that is why even in banks when you are buying selling shares .. the settlements side has to take care of sending receiving the dividends if any is issued before entry into register .. althought when dates are put in they should reflect the actual day the transfer happenned... in US with Pink sheet companies... many have enlectronic share office register service which updates demat accounts more frequently .. But your case sounds a bit weird to me ... as the shares should be in your name but the entry would have come later... 10 yrs ago i have seen share certificates where there were multiple lines and names were struck off and new name of owners written on a new line .. I am not sure it still happens liek that nowdays ... maybe it does with real small companies...

john_almighty said:

The share entry register gets updated at regular intervals.. not every instant .. that is why even in banks when you are buying selling shares .. the settlements side has to take care of sending receiving the dividends if any is issued before entry into register .. althought when dates are put in they should reflect the actual day the transfer happenned... in US with Pink sheet companies... many have enlectronic share office register service which updates demat accounts more frequently .. But your case sounds a bit weird to me ... as the shares should be in your name but the entry would have come later... 10 yrs ago i have seen share certificates where there were multiple lines and names were struck off and new name of owners written on a new line .. I am not sure it still happens liek that nowdays ... maybe it does with real small companies...

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A Private company wouldn't be in the 'settlement system'. The majority of listed companies clear through the CREST settlement system. Transfer of shares is done electronically. If the shares are in an individual name they first go into Crest Nominees (Crestco?). The register gets updates within about 24hrs. With a private company the seller signs a Stock Transfer and that goes to the Company (they probably wouldn't employ a Registrar because there would not be many transfers of shares) with the certificate. The register is changed to reflect the buyers details, presumably effective as the date on the transfer. The Company Secretary has the power to reject the transfer (maybe in accordance with the Articles of Association). The settlement of dividends is in accordance with a date set by the Exchange (the Ex date) and is effected in the settlement system (not by the company)

i work for a broker and share registrar, a gullable chap gave me a call and said he had investes 7 grand into lloyds banking group after recieveing a call from a london broker. Anyway he said to me he had wanted to sell them and the woman from the company kept telling him not to sell them and to keep holding onto them he rang numerous occasions after that and asked for that woman and got varying replies like shes left the company or shes in a meeting, in the end he decided to visit there offices and he told me that when he went to ther supposed address it was just a block of flats, obvoisly this guys been had.

I cant remeber the companys name but they were on the share register holding stock as nominees however their total holding was less than the 7grand he had invested. As there not regulated by the fsa i dont think anything could be done. I cant believe people still fall for this ****, the worst thing is the guy told me he had been conned before and the twit falls for it again. I though this sort of thing didn't happen anymore but obviously it does. Its crazy how you can conduct a boiler room scam and live with it, some people will do anything to get on.

sorry if im not clear its early mornin.